Flying on Sunday from Bucharest to Paris, I read in the Herald-Tribune Paul Krugman’s attempt to explain why Americans should envy French interventionist policies.
The line that really got me going — and frustrated, because unable then to blog — is Krugman’s report that productivity per hour worked in France is higher than in the U.S. Krugman interprets this fact as evidence of French economic success relative to that of the U.S.
Not surprisingly of late, Krugman’s interpretation is questionable.
Of course economies in which labor-market interventions, taxes, and other policies ensure high rates of unemployment (now at 10.1% in France) will likely have higher productivity per hour worked than will reasonably similar economies with fewer such government intrusions. Frank Stephenson at Division of Labour explains.